Asked by Susana Guerrero on Jul 09, 2024
Verified
The purchase of a British Rolls-Royce by a U.S. citizen would result in all the following except a(n)
A) supply of payments to England.
B) sale of dollars and the purchase of British pounds.
C) increase in imports to the United States.
D) gain of foreign exchange for the United States.
Rolls-Royce
A British luxury automobile and aero engine manufacturer known for high-quality, prestigious vehicles and propulsion systems.
Foreign Exchange
The exchange of one currency for another or the conversion of one currency into another currency.
British Pounds
The currency of the United Kingdom, which is one of the world's major currencies traded internationally.
- Gain an understanding of the intricacies of foreign exchange markets, specifically regarding what governs the supply and demand of currencies and the role exports and imports play in exchange rates.
Verified Answer
KS
Karla SalesJul 14, 2024
Final Answer :
D
Explanation :
The purchase of a British Rolls-Royce by a U.S. citizen would result in a supply of payments to England, a sale of dollars and the purchase of British pounds, and an increase in imports to the United States, but it would not result in a gain of foreign exchange for the United States. Instead, it would lead to a use of U.S. foreign exchange to pay for the import.
Learning Objectives
- Gain an understanding of the intricacies of foreign exchange markets, specifically regarding what governs the supply and demand of currencies and the role exports and imports play in exchange rates.